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tv   Scandalous  FOX News  January 1, 2019 2:00pm-3:01pm PST

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those documents showed up. >> oh, please. really? ♪ >> previously on "scandalous"... >> jim and susan mcdougal were straight out of central casting. >> jim got the clintons to invest with him in the whitewater estates. >> whitewater failed. >> jim mcdougal bought madison guaranty savings and loan. >> savings and loans began to drop like flies. >> here was this young upstart governor from arkansas. came out of nowhere. >> i still believe in a place called hope. >> president clinton canceled his public schedule after the tragic death of his white house lawyer vincent foster. >> there were all kinds of crazy theories. >> whitewater was complicated. >> the politically smart thing to do became the appointment of an independent counsel. >> the president, today, has directed the attorney general to appoint a special counsel. >> she basically said, "i won't be talking to you again until this is over." >> there were all sorts of
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rumors and allegations. if this is really all true, where are the women? ♪ ♪ >> amid the christmas cheer of 1993, the clinton white house was under attack by well-funded right wing activists determined to take down the president. >> there were certainly people, based on ideology, who wanted to knock bill clinton out. there's no question about that. >> what a wild cast of characters it was, and particularly his enemies, because they were, in many cases, quite sleazy and untrustworthy. but there was always sort of legitimate questions that the clinton folks didn't want to answer. >>the american spectator,a conservative publication, had published an article saying that bill used troopers to get women. >> the article featuring what would become known as the troopergate allegations was financed by billionaire conservative
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richard mellon scaife. it was part of his arkansas project, a $2.4 million venture launched to dig up negative dirt on the president. >> usually, journalists dig for details 'cause they want to win pulitzer prizes, but, sometimes, they do it because they have an ideological basis for the hatred. and, here, i think there were a combination of factors. >> seven weeks after the spectatorarticle was published, those arkansas state troopers would resurface, repeating their allegations against their former boss. a press event at the conservative political action conference, or cpac, in washington, d.c., featured the troopers, along with the woman that thespectatorhad only called paula. >> mrs. paula jones. >> thespectatorarticle alleged that jones had gone to the then-arkansas governor's hotel room in 1991 for a sexual encounter. >> he leaned up against the chair. he started to put his hands and slide up my legs. >> her story was different from the published account. >> as she told the story, she was summoned to the hotel room
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by the governor's security guard, and he proceeded to make sexual advances to her. >> it's wrong that a woman can't work in the workplace and be harassed by a figure that high. and it's just humiliating, what he did to me. >> and it drew a lot of skepticism, because paula jones would not explicitly say what it was that went on. >> the event did not get the media attention its organizers had hoped for. >> although, people at the cpac conference were billing this as a big-news, startling disclosure, the whole setting seemed a bit untoward. clearly being put on by the president's political enemies. she was paraded out there in ways that were a bit unseemly. >> but isikoff decided the story was worth investigating a bit more. >> she was saying something
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that, if true, could be quite problematic. and i arranged to talk to her the next day. >> at the same time, the organized effort of the arkansas project focused on another way to stir up controversy. conservative author chris ruddy, who wrote for richard mellon scaife's pittsburgh newspaper, focused on vince foster. he would later author a book called "the strange death of vincent foster." ruddy argued that multiple irregularities suggested foster's death had been anything but a simple suicide. >> not only may foster not have committed suicide, he may not have committed suicide in fort marcy park. the body may have been moved. >> even in the early days of the internet, the conspiracy theories unleashed by ruddy and the arkansas project went viral and continue to this day. >> i was back one weekend in memphis. and a federal law-enforcement agent, who is a friend of mine -- he said, "well, i'm convinced foster didn't kill himself, because the gun was found in his right hand, and
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foster's left-handed. and i said, "now, where did you get that information?" "well, i heard it on tv." "guess what. foster's right-handed." "oh." >> it became yet another, you know, grist for the mill of people who wanted to accuse the clintons of horrible things, including murder, which was ridiculous. >> the seeds of doubt sowed by the arkansas project would hound the clintons for decades. but few knew the damage that would be caused by the american spectator's one-line mention of a woman named paula. >> the complaint filed with the united states district court here today in little rock charges mr. clinton and trooper ferguson with, among other things, sexual harassment and civil-rights violations. >> the spring of 1994 saw a clinton administration still reeling from early stumbles, constantly trying to climb out from under mountains of bad press. >> we were looking at things we
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didn't think, you know, could be survived, and there was a lot of it. nowadays, we're in the midst of the same sort of phenomenon with this unbelievably controversial president, who does and says things that we've never seen a president do or say before. and it may be more intense now than it was then, but it was very intense back then. >> on the morning of may 6, 1994, just two days before the three-year statute of limitations for civil-rights claims was set to expire, lawyers for paula jones filed suit in little rock's federal district court. >> and it was a mob scene of press. they didn't know about us at the time, so we walked past them. i had the stack of complaints with me. >> counsel. >> and i passed them along to the clerk. >> sorry, guys. >> is this the jones case? >> and all hell breaks loose. "it's the complaint! they're filing it!" craziness up at the clerk's office. we get in the elevator, and the cameras are literally up to our noses. they're now following us out of the building. >> there remains a number of unanswered questions about who
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is behind paula jones and whether this is a legitimate lawsuit or the opening salvos of the 1996 presidential campaign. >> questions about who was financing the lawsuit went unanswered. >> as to matters of finances and to who pays, that is a subject that is never discussed by me. >> after the filing, the lawyers handed a copy of the complaint to a reporter. >> and i told everybody, "i think you should look at paragraph 22." it's the one that said that paula jones knew that there were distinguishing characteristics in clinton's genital area. >> jones had actually missed the deadline to file a sexual-harassment claim. instead, her lawyers argued that the president used the powers of his office to violate her civil rights. >> the reason i filed the complaint is because i asked for an apology and i didn't get an apology. and, instead, he called me pathetic and a liar. >> the suit asked for $700,000 in damages. >> he needs to pay for what he's done. >> the first push-back from the clinton white house was, "this
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was all concocted by the president's political enemies to score points." if this was really true, it would have come out during the campaign. >> this suit is about publicity. it's about talk shows. it's about money. >> bill clinton hires bob bennett, one of the big-shot lawyers in washington. if this is a nothing case, why do you bring in a nuclear bomb to try to blow up the other side, when all you could do it is with a rifle. >> that same afternoon, president clinton met with the prime minister of malaysia. but it was the lawsuit, not foreign policy, that reporters wanted to hear about. >> i'm going back to work. i'm not gonna dignify this by commenting on it. >> in june, the president's lawyer filed a motion asking the court to postpone the matter until after the clinton presidency. >> they make an interesting legal argument that the president ought to be immune from civil litigation while in office. >> bennett argued that if lawsuits like this were allowed
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to proceed, it would invite thousands of copycats. >> do you, as a citizen, want the president of the united states spending all his time in litigation, with lawyers being deposed? >> and if there was one thing that washington, d.c., was not lacking in the spring of 1994, it was people asking questions. i've always looked forward to what's next. and i'm still going for my best even though i live with a higher risk of stroke due to afib not caused by a heart valve problem. so if there's a better treatment than warfarin, i'm up for that. eliquis. eliquis is proven to reduce stroke risk better than warfarin. plus has significantly less major bleeding than warfarin. eliquis is fda-approved and has both. so what's next? seeing these guys. don't stop taking eliquis unless your doctor tells you to, as stopping increases your risk of having a stroke. eliquis can cause serious and in rare cases fatal bleeding. don't take eliquis if you have an artificial heart valve
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we're working to make things simple, easy and awesome. ♪ >> by march 1994, the trickle of questions about the whitewater investigation had turned into a tidal wave. special prosecutor robert fiske had gotten a guilty plea from former municipal-court judge david hale, who had defrauded the small business administration. this would not have garnered much national attention had hale not tried to shift some of the blame to the man who was now president. >> to get out of trouble, he used people that he knew, like a drug dealer. "i've got somebody i can give you, if you'll help me out." >> after he was indicted, he had entered into plea negotiations, which had not gone well. and, so, he went off in a huff and made an accusation. >> hale claimed he made the bogus sba loan because bill clinton had pressured him to. >> if that were true, then governor clinton would have been asking david hale to make a false statement to the
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small business administration. >> he also implicated the man who replaced clinton as arkansas governor, jim guy tucker. as it became harder to separate fact from fiction in the complicated whitewater saga, the fallout in washington was very real. white house counsel bernard nussbaum resigned, after being hounded by republican accusations of trying to interfere with the whitewater probe. nussbaum had met with officials at the treasury department to get updates on the investigation into jim mcdougal's failed madison guaranty savings and loan. >> i don't think bernie nussbaum thought for a minute he was doing anything wrong. >> 10 days later came another resignation, associate attorney general webb hubbell, a former little rock law partner of hillary clinton. >> it became known that he had engaged in billing fraud while he was at the rose law firm. >> he had been filing false expense accounts, which basically defrauded his partners, but also his clients. >> there are no words capable of fully conveying to you my deep
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respect and admiration for webb hubbell or how sad this event makes me. >> his resignation is a personal blow to the president, and it overshadows white house attempts to refocus public attention on his agenda. >> he strongly feels that he will be vindicated, but it's gonna take some time for him to do it and that he shouldn't be working at a public job while he's doing that. and i think that's right. >> capitol hill republicans are pressing ahead with watergate-style public hearings. >> if you ever needed proof that we need hearings, that we need some sense of what's going on with the clinton administration, then this latest resignation should be more than enough proof. >> the resignations only raised more questions, and, increasingly, it was now the first lady in the spotlight. reporters dug up records showing that she had netted nearly $100,000 in commodities trading back in 1978. >> it was a bombshell, because the facts were unbelievable.
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>> she had invested $1,000 in the futures market, under the guidance of a guy named jim blair, who was a lobbyist for the arkansas poultry industry. >> so, in late april, hillary clinton decided to do something unprecedented for a first lady. she held a solo news conference in the east room at the white house to clear the air. >> she was dressed in pink, she sat next to a vase of flowers, and she answered questions for a really long time. >> this is really a result of our inexperience in washington, if you will, that i really did not fully understand everything that i wish now i had known. >> she sat up at the front of the room and she took a lot of questions. and she's an articulate person. and she handled them with a certain aplomb. >> surrounded by an anxious press, she offered her most detailed public answers yet on whitewater matters. >> we went into whitewater to make money, not to lose it. i mean, the embarrassing thing to me is that we ended up losing
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money, and it keeps being beaten like the deadest horse there is, over and over again. >> of course, one of the problems she had at the time was that people accused her of not being open and transparent. >> you know, it's a learning experience, sometimes, a difficult one. >> no first lady, in my memory, had ever played the sort of policy role. bill clinton had said, famously, during the campaign that if you elected him, you got two for the price of one, because you got her. the implication being that she would be a sort of co-president. >> she was trying to exhaust us and say, "i'm willing to answer anything that you have to ask me." and this became one of hillary clinton's great traits. she has the incredible stamina. and she sat there and answered all the questions. >> the press conference lasted more than an hour, and she offered to do more, if needed. >> that was significant -- the optics, that she tried to look soft and feminine and appealing, wearing pink, with the flowers. that was all, you know, conscious and part of their strategy. >> despite yielding little new
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information about her finances, pundits in the press were in consensus -- the messaging had worked. 22 years later, critics would attack her for a lack of press conferences during her presidential campaign. but her first one seemed to win them over. the first lady's public q&a would also serve as a dry run for a private one that the clintons would do behind closed doors. >> i remember calling up david kendall, who was representing them both, and said, "you know, david, i think it's important for everyone that we do it under oath." >> independent counsel robert fiske was nearly ready to close out his investigations of vincent foster's suicide and allegations of white house interference, but he first wanted to talk to the clintons. >> i said, to david kendall, "this will be very limited. it's just gonna be on these two subjects. and we're not gonna ask him anything about arkansas-related matters -- whitewater, any of that. >> fiske spent 2 1/2 hours grilling the president and the first lady separately at the white house. later that evening, 3,000 miles
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away, in brentwood, california, nicole brown simpson and ron goldman were savagely murdered. it would be the start of a california media circus that would rival the one to come in washington, d.c. two weeks later, on june 30, 1994, robert fiske issued his two reports. the first concluded that no evidence was found to show obstruction of justice related to the madison guaranty inquiry. the second determined that vincent foster had, indeed, committed suicide in fort marcy park on july 20, 1993. the report detailed how simple forensics could explain away the conspiracy theories, like why little blood had been visible at the scene, and proved that foster's body could not have been moved. >> he was lying on his back on the incline. when they found him, his shirt was spotless. when they put him on the gurney and his body was horizontal, that blood flowed back, and by the time they got him to the morgue, his shirt was blotched with blood. if he had been shot somewhere
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else and brought to fort marcy park, that's the way his shirt would have looked. >> republicans in congress were not satisfied. they demanded public hearings and pushed back hard when fiske asked that his investigations be completed first. >> independent counsel robert fiske has been masterful in his role has congressional traffic cop. he has commanded congressmen to go and when to stop. >> in late july, both the house and senate opened their own hearings on whitewater. a few days later, fiske flew to florida to visit his mother-in-law, who was ill. >> i got off the plane, and i was carrying a beeper in those days. and it said something like, "call your washington office." so i called, and mark stein said, "you won't believe this, but you've been replaced by ken starr." that's how i found out. >> so, that's how i began -- with a phone call in the early summer of 1994. i can't tell you who i am or what i witnessed, but i can tell you liberty mutual customized my car insurance so i only pay for what i need.
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>> live from america's news headquarters. a change of guard at the pentagon. defense secretary jim mattis is officially out, replaced by patrick shanahan. mattis resigned on december 20, 1 day after president trump ordered withdrawal from u.s. forces in syria. he planned to stay through february but the president decided to oust him. mattis urged personnel to remain undistracted from their mission
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to uphold the u.s. constitution. north korean leader kim jong un says he hopes to continue denuclearization talks with president trump. he also warned the u.s. against continued sanctions. nuclear talks have stalled since june. now back to "scandalous." >> i've never understood why robert fiske was removed as special prosecutor. it remains, to me, somewhat inexplicable. >> i don't think any of us saw it coming. one understood the logic of it, that a new independent-counsel statute had been enacted, and judges are supposed to appoint the counsel. robert fiske had been appointed by janet reno. >> reno had asked the three-judge panel to reappoint fiske. the judges, instead, appointed kenneth starr, a former federal
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appeals-court judge and solicitor general in the reagan and bush administrations. >> it clearly set back the whitewater investigation. fiske was ramping up for indictments. >> we were really on the verge of bringing some major cases. and there was criticism, you know, i hadn't been doing enough. >> there was some discontent, on the part of republicans in particular, about some aspects of the investigation not being fully explored. >> and i thought, "i've only been here four months. >> and now, suddenly, here was a new person coming in to start the investigation from scratch. >> i think many americans saw the investigation as becoming very political. robert fiske was well-known for not having any kind of political point of view, whereas ken starr was regarded as republican and quite conservative. >> inside the special counsel's office, the mood was grim. >> the lawyers on my staff were very, very upset about it, and
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some of them wanted to say, "we're out of here." and i said, "no, you can't do that, and this is really important for the country." ken starr is a person of integrity, and he'll do the right thing. >> republicans in congress immediately applauded the choice. >> since it's our turn, we want somebody that the attorney general didn't appoint. i think that's what's behind this. so there's no appearance of conflict. >> at an outdoor press conference, robert fiske graciously passed the torch to his successor... >> i mean, i think there's gonna be, inevitably, a little bit of a loss in momentum, but we're gonna do everything we can to minimize it. >> ...as ken starr landed in little rock. >> can you talk to us, ken? >> no, i won't be making any statements. >> starr began filling out his staff, including maryland prosecutor bob bittman. in little rock, he brought in hickman ewing jr. a former u.s. attorney from tennessee. >> there was the washington office and the little rock office. i was on the washington team. >> i got a call from someone, and they said that ken starr's looking for somebody experienced
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in white-collar crime and corruption cases who can speak southern. well, that would be me. >> as the new team assembled and the investigations ramped up once again, media attention intensified. >> we really tried to concentrate and focus and to steal ourselves and to shield ourselves as much as possible to what was going on in the public square, so to speak. >> by late summer of 1994, it was unclear if anyone yet realized just how hard that would become. by august, the whitewater headaches had damaged the white house's messaging. not only had a new independent counsel begun digging around, but republicans in congress had turned up the heat in the first round of congressional hearings. and then came the midterm elections. >> when president clinton was first elected, he brought with him a strong democratic majority. >> but 1994 had already looked particularly tough for democrats. >> republicans were gaining in the country, and the early years
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of the clinton administration were rocky and chaotic. >> and history was not on their side. in every midterm election since world war ii, the incumbent president's party had lost seats in the house of representatives. so the long, hot summer in washington left many asking, "was the comeback kid out of comebacks?" >> we believe in this contract and these reforms so deeply. >> republicans, led by minority whip newt gingrich of georgia, unveiled their blueprint to take back congress called the contract with america. it was a bold agenda that included tax reform, defense-spending increases, and congressional term limits. >> i don't think this contract is a good idea, because it promises everybody a tax cut, promises a defense increase, promises to revive star wars, and promises to balance a budget. >> meanwhile, the clinton domestic agenda, which included the first lady's comprehensive healthcare plan, had stalled. >> hillary clinton got a policy portfolio in the white house in
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a way that no other recent first lady had gotten. >> the country was so not ready for it that it never even came to a vote, and it hurt him, politically, very badly. >> that was one of many failed democratic attempts at universal coverage, and they had to wait until barack obama was elected to actually pass something. >> on election day, the voters spoke -- loudly. >> we lost congress in 1994 and lost not just the senate, but the house, which had been in democratic hands since 1949. >> i must certainly bear my share of responsibility, and i accept that. >> the '94 revolution was the voters rendering a verdict on bill clinton's first two years as president. he had campaigned as a moderate. he got into office and he governed like a liberal. >> the gop picked up a net gain of 52 seats in the house and 8 in the senate. >> he was shocked by that. >> democratic control of the house of representatives was considered a given, that it was an unshakable reality. so this event was a big deal at the time.
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it was quite a new day in washington. >> nearly 40 incumbent democrats were defeated and not a single republican. >> there were all sorts of things that caused a reaction that the republicans were able to capitalize on, and they took over control of the house of representatives. it might have happened anyway, but that was a huge deal. >> combine that with the fact that gingrich was a shrewd political strategist, who put together a contract for america. it just swept out the democratic congress. >> clinton also vowed to work with the new republicans in congress. >> i'm gonna do my dead-level best to do that and to be less partisan. >> on policy issues, it seemed to pay off. >> bill clinton had had a history of being adaptable to new political circumstances. >> you could make the argument that bill clinton did better when he had an opposition congress. he was able to find issues where he could get agreement. >> so he was perhaps better suited than many a politician would be to adjust himself to the demands of the time. >> still, the white house knew what agony could lie ahead.
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prior to the midterms, democrats had controlled the congressional committees and their investigations. >> we were watching, very closely, the whitewater investigation, all the other investigations. and we knew they were going nowhere. we knew travelgate was a nothing burger. >> but congress would now be ruled by some of the president's harshest critics. in addition to speaker of the house newt gingrich, the senate hearings on whitewater were now led by a fiery senator from new york. >> would you -- would the fbi have done that under normal circumstances? "yes" or "no"? ♪ ♪i've been really tryin', baby ♪tryin' to hold back this feeling for so long♪ ♪and if you feel, like i feel baby then come on,♪ ♪oh come on let's get it on
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>> bob fiske and his team started looking at the rose law firm, and they found that webster hubbell was manipulating bills. >> clients were paying for expenses that had never occurred. >> now hubbell was forced to admit to stealing nearly $400,000 from his law partners and more than a dozen clients, including the federal government. >> judge hubbell has pled guilty to two felony counts. >> ken starr had gotten his first conviction. but he had his sights set on a bigger fish. >> as part of mr. hubbell's guilty plea, he was required to provide any information he had relating to any criminal or other activity that included the president and mrs. clinton. >> we had been quite willing to postpone the sentencing so that we would have the opportunity to work with judge hubbell. >> the first rule of committing crime in america is -- always commit crimes with people more important than you so you can
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turn them in and they can't turn you in. >> 8 miles west of where webb hubbell sat with prosecutors and tried to keep himself out of prison was the u.s. district court for the eastern district of arkansas. it was there that judge susan webber wright had been pouring over legal briefs filed by attorneys for paula jones and the president of the united states. >> on december 28, 1994, u.s. district court judge susan webber wright ruled that paula jones' lawsuit could not go to trial until after president clinton left office. she accepted the argument that a trial would constitute a significant burden for a sitting president. >> lawsuits take up an enormous amount not only of time, but of emotional energy. >> although, she did allow fact-finding procedures to proceed. >> we could ask him for documents. we could take his deposition. >> the jones team immediately asked the eighth circuit court of appeals to reverse the ruling, arguing that paula jones should have the same rights as
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anyone else. >> we said, "look, mr. president, you have no immunity. you have to answer these charges." he said, "well, i'm too busy. i'm running the country here. i'm the most powerful man in the world. you can't bother me. excuse me?" >> paula and her lawyers in little rock would have to wait, 1,000 miles to the northeast, however, sat a restless group that was tired of waiting for answers -- newly emboldened republicans on capitol hill. >> the day before republicans will officially take over the congress, the incoming chairman of the senate banking committee threw down the gauntlet on the whitewater affair. >> the white house has concealed, disguised, and distorted the truth, all in the service of politics and the president's self-preservation. >> on the morning of april 19, 1995, an anti-government gulf war vet named timothy mcveigh drove a rented truck to the oklahoma city federal building. it contained nearly 5,000 pounds of explosives. [ indistinct shouting ]
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>> we've got a hot spot! get them back! >> the blast tore the structure in half. 20 children in the building's daycare center were among the 168 people killed. >> the bombing in oklahoma city was an attack on innocent children and defenseless citizens. it was an act of cowardice and it was evil. >> as investigators sifted through the wreckage, 1,300 miles away, in washington, lawmakers were busy working on a very different inquiry. although special counsel robert fiske had already issued his report on the vince foster suicide and ken starr had taken over the whitewater probe, republicans in congress were determined to do their own investigations and hold public hearings on all of it. >> the democrats were desperate to obstruct. the white house was desperate to obstruct. >> among those who testified was
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jean lewis, the senior investigator for resolution trust corporation, whose criminal referrals had initiated the whitewater investigation. >> it was terrifying. >> she submitted certain of her computer records before her testimony, and people didn't know as much about metadata at that time. the democrats were able to find embarrassing things that she had said. >> did you express that mr. clinton was "a lying bastard"? >> i was already on the record as a registered republican. my politics were not a surprise to anybody on that committee. >> what the democrats found was a negative letter about her stepson. >> i likened his veracity to that of governor clinton. and my side comment in that letter was "the lying bastard." i have to confess, i'm very curious as to where you got this letter, because -- >> we got it from you. >> i don't think this was on a disk that i gave you, counsel. >> apparently, you didn't think it was on the disk, but it was. [ laughter ] >> they undeleted the letter
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from the disk to undermine my credibility. >> later, when democratic senator paul sarbanes hammered away at the credibility of her criminal referral in the whitewater matter, it all seemed to be too much. >> we got a career person saying that it looked like a junky case, half-baked -- >> senator, mrs. lewis is having chest pains. >> yeah. >> we're gonna take a 10-minute break, a 15-minute break. we stand in recess. >> my face had gotten red. i was having a hard time focusing my eyes. i was frightened that i was having a heart attack at the time. >> she ended up going to the hospital that night. >> the whitewater hearings were not lacking in drama. but since they were only broadcast by c-span in the summer and fall of 1995, they didn't attract the attention that republicans had hoped for. the network news divisions were all preoccupied with another circus at the time, the trial of o.j. simpson in los angeles. but behind closed doors back in washington, a group of secretive lawyers were cooking up a way to
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land the paula jones lawsuit back on the front page. >> paula jones had the most amazing legal talent working for her, with no one in the media knowing, with paula jones not knowing. >> they called themselves "the elves." and they saw to it that the jones lawsuit kept working its way through the legal system. in december 1994, u.s. district court judge susan webber wright had ruled that the jones lawsuit would have to wait until bill clinton was out of office. her lawyers had filed an appeal, and settlement negotiations between the jones and clinton camps had gone nowhere. >> at some point, she offered to drop the lawsuit entirely in return for an acknowledgement by clinton that he had sent a trooper to fetch her. and hillary said, "you're not gonna do that. i won't let you do that." >> the case was designed by political activists in order to bring down the presidency. and it could have and should have been settled at the very,
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very beginning. >> january 9, 1996, the eighth u.s. circuit court of appeals made their ruling. in a 2-1 vote, the three-judge panel ruled that president clinton has no constitutional basis for delaying the suit and that paula jones could have her day in court. the ruling all but guaranteed one thing. >> this case is going all the way up to the supreme court. i did a lot of research into dna tests. most can tell the continent or country
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before the appellate court ruled that paula jones' lawsuit could go to trial, it was a different news story that gripped the beltway. >> a stack of papers reappeared on a table in the white house book room. >> when investigators tried to figure out how involved, if at all, the clintons had been in jim mcdougal's failed madison guaranty savings and loan, they were missing one important clue. >> one of the keys to a prosecution case was the rose law firm billing records. >> little rock's rose law firm had done some legal work for madison. >> a savings and loan that collapses at the cost of tens of millions of dollars. >> and their billing records would show how much time hillary clinton had spent working on behalf of the failed bank. >> they were a key piece of information as to what mrs. clinton's role was, and
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we'd been seeking those records for many years and been told they could not be found. >> the most serious fraud that was engaged in at madison guaranty was something called the castle grande deal, a fraudulent scheme to prop up the books of a dying savings and loan. >> castle grande resulted in the taxpayers losing $4 million. and whose fingerprints are on there? hillary clinton's. >> mrs. clinton was not the primary partner who worked on it, but she worked on a very important memo that was used to deceive federal bank examiners. >> the records were missing, and we viewed that as extraordinarily odd. >> special prosecutor robert fiske issued the first subpoena for the rose law firm records early in 1994. >> we issued that subpoena, i think, in, probably, february, right -- one of the first things we did. and by the time i left, in august, we had not received the records.
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>> the independent counsel had hit a dead end in this part of the madison guaranty investigation. >> the clintons had been subpoenaed for those records by fiske. and then we reissued a subpoena -- "produce all records you have relating to rose law firm, madison guaranty," et cetera. >> the records were lost for good...or so it was thought. >> on january 5th of '96, david kendall, the lawyer for the clintons, calls our washington office and said, "oh, we have found some records." >> suddenly, the records had reappeared. but where they turned up and how they were found were almost as shocking as the events leading up to the discovery. >> well, it was like a bonanza. >> quite amazing that they end up in the living quarter of the white house. they've got no business being there. there was a theory that those records were being kept by vince foster and that they were spirited by certain people from
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his office after he died. >> going into the office of a man who committed suicide and removing any papers is always gonna raise very significant suspicions. conspiracy theorists love to speculate. good lawyers want to see the evidence. >> vince foster committed suicide in july of 1993, and the removal of documents from his office had long been a contentious issue. >> carolyn huber, who had been an office manager at rose and then went to washington with the clintons -- she had found them in the book room in the white house. >> they were folded. i didn't open them. i just picked them up and plunked them down into the box. >> it was huber, a white house aide, who said she had brought personal files belonging to the clintons to the white house residence after foster's death, at the request of the first lady's chief of staff. >> how did you come to rediscover them in january? >> i had some new furniture built in my office. i'd start trying to put my things up on the shelves and i picked up this billing memo and opened it.
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and i was surprised. >> the timing also raised some eyebrows, coming just days after the agency investigating savings and loans had disbanded and after the statute of limitations on various relevant issues had expired. >> the rtc hits its sunset date on december 31st. that ends any additional possible civil claims being filed against the rose law firm. and they magically appear within the next seven days. oh, please. really? >> all of this meant that hillary clinton had some new questions to answer. >> mrs. clinton had always said she didn't do much work for madison guaranty. the rose records showed she did almost 60 hours of work. >> that's a lot of time on the castle grande case. but she said, "oh, no. i had nothing to do with it." >> it was very important that the grand jury hear her explanation. >> people were really out to get the clintons, and getting hillary clinton in front of a
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grand jury sent an important political message. >> as a result, on january 26, 1996, hillary clinton became the first first lady in american history to be called in front of a grand jury. >> the first lady herself made the decision that, "we'll go into the grand jury in a very public way." >> i, like everyone else, would like to know the answer about how those documents showed up after all these years. it would have been certainly to my advantage in trying to bring this matter to a conclusion if they had been found several years ago. >> as mrs. clinton testified about the discovery of her old records, she had no idea that another story had been quietly unfolding within the white house, one that would also take two years to be discovered, but with far greater consequences. i switched to liberty mutual
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paula jones' lawsuit was headed for the supreme court. the whitewater investigation was being led by ken starr and was picking up steam after the surprising discovery of the rose law firm billing records. politically, president clinton and the republican-controlled congress, led by speaker of the house newt gingrich, were at a stalemate over domestic spending cuts. >> unfortunately, republican leaders in washington have put ideology ahead of common sense. >> it's very sad to see the president choose this political game, rather than sitting and talking and negotiating like adults. >> negotiations halted, and the federal government shut down. >> a lot of innocent people will be hurt as a result of what happens in the next day. >> the national monument could become the most visible symbol of a government in political and economic default. >> 800,000 non-essential federal employees were furloughed while democrats and republicans slugged it out over how best to achieve a balanced budget.
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to keep the executive offices running, unpaid interns assumed additional duties, such as answering phones and delivering pizzas to the few employees who remained at work. november 15, 1995, marked the second day in the government shutdown and the first secret encounter that would push the united states towards a constitutional crisis. on the next episode of "scandalous"... >> there's a story here, but it's not the one that you think it is. >> bill clinton lived a double life. "saturday night bill" and "sunday morning president." >> this was all happening in the oval office. and, frankly, the recklessness of it -- it almost seemed like a kind of junior-high romance. >> the president said, "if there are two people in the room and both people deny what happened there, then nothing happened." >> there was this woman who used to work in the white house named linda tripp. >> there had been so many corrupt activities at the white house, monica lewinsky
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became the straw that ultimately broke the camel's back. ♪ >> new year but no resolution to a partial government shutdown. president trump says calm down and enjoy the ride. special counsel robert mueller's russia probe nearing a pivotal point, or is it? we have heard many predictions. tonight we take a look at the people and events shaping the investigation. and find out whether it's really winding down. "addicted in america," part two. we investigate alcohol addiction all across america. this is "special report" ." >> ed: good evening, welcome to washington. i am ed henry in again for bret baier. president trump woke up early and again was

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